Investment Strategies of the World’s Wealthiest
It might have been Tony Robbins who first said that success leaves clues. The advice is solid. If we want to achieve something we haven’t done before, simply look to those who have already succeeded in that area and emulate their strategy.
We can apply this to lots of different areas of our lives that we want to improve, whether in pursuit of personal growth, professional excellence, or financial prosperity. Simply model someone who’s already getting the results you want and do what they’re doing.
In the world of investment and commercial real estate, this strategy can be especially effective. Any type of investment comes with risk. But by following in the footsteps of those who are where you want to be, you might just get there that little bit faster.
We can assume the ultra-rich of the world must be doing something right, and we can look to where they’re putting their money to help guide us toward asset classes that may hold opportunities for us. Even without the trust funds, expensive advisors, and exclusive family offices, there are lessons everyday investors like you and me can take from where the ultra-wealthy are hedging their bets.
The rise in commercial real estate.
According to “The Wealth Report” by Knight Frank, private investors were the most active buyers of commercial real estate in 2022. In fact, in 2022 alone, private wealth was responsible for 41% of all global investments in commercial properties, equating to $455 billion. This marks the highest-ever share of private wealth in global commercial real estate investment, a significant shift as private investors overtake institutional players for the first time.
This has occurred during a time when many investors have flocked to term deposits as a safe haven to ride out the economic headwinds. Although the day-to-day volatility may seem higher with commercial property, it seems the hidden cost of forgoing investing in growth assets was a risk not worth taking for the ultra-wealthy. Astute investors see the value and long-run potential in prime commercial assets and their ability to provide not only long-term wealth creation but a viable hedge against inflation.
New Zealand commercial real estate.
According to “The Wealth Report”, of all commercial and industrial sales over $20 million in New Zealand last year, 47% were to private buyers—almost double that of institutional capital and three times that of the syndicated market.
Locally, New Zealand’s wealthiest man, Graeme Hart, is showing his confidence in the sector by constructing $155 million worth of commercial and industrial buildings in south Auckland. His latest ventures come as vacancy rates remain low and the industrial property market holds promise.
While the purchase of $155 million of prime commercial real estate might be out of the reach of the everyday individual investor, there are ways to access the prime market and all its benefits with more modest capital. At Classic Collectives, our focus lies in prime commercial real estate valued at $10 million and beyond. Through a process of syndication, we bring together small groups of wholesale investors to share in their ownership, offering entry points that typically commence around $250,000. Our tenants are of the same prime calibre: national, international, and government operators offering stable and long-term leases.
Follow the clues.
It’s evident that both the ultra-wealthy in New Zealand and across the globe are capitalising on the opportunities at hand and going after prime and premium commercial property now. With an election looming and market sentiment shifting, perhaps it’s time to look beyond the crisis and follow the clues being left by the world’s wealthiest.
